Creating, Financing, and Marketing a Business Essay examples

1456 Words May 27th, 2012 6 Pages
Assignment 2 - Creating, Financing, and Marketing a Business Carol Brandon

Professor Mark McMullen Bus 100 - Introduction to Business Strayer University

May 25, 2012

Creating, Financing, and Marketing a Business

Carol Brandon

Entering into a written agreement is one way to form a partnership; a partnership may be formed through the actions of the partners as they operate the business together. Even if individuals have an agreement that says "we are not a partnership," the law may find that there is a partnership and hold one or more partners liable for some business-related obligation. The simplicity and flexibility in creating a partnership may be one of the main advantages of the partnership as a form of business.
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The risks of operating as a partnership include both legal issues and business issues. From a legal standpoint, partners are exposed to liability in a manner that is often unacceptable. From a business operation standpoint, co-ownership of a business with one or more partners can

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Creating, Financing, and Marketing a Business

Carol Brandon

be so difficult that the business cannot succeed. Under the law, partners are agents of the partnership, and as an agent, each has authority to act on behalf of the partnership. A partner can enter into binding agreements, hire and fire employees, accept orders, extend credit, etc. One partner's poor business decision making, poor judgment, poor negotiation ability, or poor management ability can doom the partnership and also expose all partners to significant liability. Partners face "joint and several liabilities," which means that each partner is personally liable for the full amount of any obligation of the business. Even if a partner has only a small percentage ownership, he or she can be held responsible for 100% of a partnership liability. A partner can be held liable for partnership liabilities due to contracts, debts, taxes, employment, or claims arising from product liability, accidents, services rendered by the business, or even acts of other partners on behalf of the business. Partnership law does not adequately set out the rights or obligations of partners. Without a thorough

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